Helios Underwriting, the Lloyd’s of London investment and underwriting vehicle, has announced the current mid-point forecasts for its portfolio of syndicate capacity for the 2020 and 2021 years of account, based on second quarter 2022 estimates.
The company, which acquires and consolidates private underwriting capacity at Lloyd’s, recorded an increased capacity position of £232.7 million of account as at as August 18th, 2022. This is comparable to the £145 million and £115.6 million reported in 2021 and 2020 respectively.
This updated figure consists of £172 million retained capacity, compared to the £93.5 million reported in 2021; as well as a reinsured capacity of £60.8 million, which compares to the £51.5 million reported last year.
According to the company’s report, the mid-point forecast for 2020 year is continuing to improve, increasing the profit for the underwriting year to 1.84% notwithstanding the impact of the investment losses incurred on syndicate asset portfolios during this first six months of the year.
The trend of outperformance against Lloyd’s market average has increased to 1.59% (March 2022 – 1.01%), which according to the company, demonstrates the quality of the portfolio Helios has built.
The mid-point estimate for 2021 has improved to 2.40%. The underperformance against the Lloyd’s market has narrowed since March 2022 to 1.85% (March 2022 – underperformance of 2.30%).
Helios has said they expect the gap in relative performance to narrow over the next 15 months as it has done in the past.
The syndicates supported by third party capital have been more conservative in their published estimates over the 36 months to the close of the year of account due to the transparency of each syndicate’s ’result and the overall result of these syndicates has improved whilst the estimates of the aligned syndicates has remained unchanged, Helios noted.
Nigel Hanbury, Chief Executive, commented: “As the only listed consolidator of private capital at Lloyd’s, Helios offers a unique opportunity for investors: growth and returns from exposure to the Lloyd’s market through our strategy of acquiring the capacity of the better performing syndicates. Over recent years, our strategy has yielded superior results, with returns on average 5.1% better than the Lloyd’s market itself.
“We have increased the retained capacity to £172 million in recognition of market discipline and a harder market. We remain confident that we shall deliver improved results when compared to the Lloyd’s market as a whole, and we look forward to creating further shareholder value as the benefits of the larger retained capacity flows through to the income statement.”
